The Balance Careers
Why Lead Generation Is Critical to the Sales
Process
BY
WENDY CONNICK
Updated December 08, 2018
Lead generation is the method of getting inquiries from potential customers. In the old
pre-Internet days of sales, lead generation occurred at places like trade shows – visitors
to a company's booth would fill out a card with their contact information and turn it in to
receive a call back from that company's sales team. Since the rise of the Internet, many
businesses use their websites as a lead generation option. Email also offers lead
generation potential, since companies can buy another company's email marketing list
or pay them to promote the company on their own marketing emails.
Most marketing experts recommend that companies use at least 10 different
lead generation methods to ensure that their pipelines remain full.
Quality Is as Important as Quantity
Because lead generation is the first step in the sales process, both quality and quantity
are important factors. Quality leads are leads that a salesperson has a good chance of
closing, which means they must at least have the potential to become customers. Every
lead list will have a number of junk leads – people who are not qualified to buy the
product for some reason – but the smaller the percentage of bad leads, the less time
salespeople will waste while processing that list. Quantity is also important because
even a salesperson with a list of 100% good leads won't be able to close every one of
them.
A salesperson with 100 good leads might be able to make 10 appointments, out of
which 4 will close the sale. Therefore, if a salesperson has a quota of 40 sales per
month, she will need 1000 good leads per month just to make the minimum
required number of sales.
Each lead generation technique usually has a tradeoff between quality and quantity. For
example, a form on the company website that visitors can fill in to request a call back
will generate high-quality leads – these visitors are very likely to buy since they're
interested enough to want to hear more – but probably won't generate a lot of leads. On
the other hand, a lead list that's based on a newsletter subscription list from another
company may generate a lot of leads, but they won't be nearly as interested or qualified.
This tradeoff is another reason why companies are wise to use many lead generation
methods.
Lead Generation Services
Many marketing agencies offer lead generation services for business that don't wish to
develop their own systems. These agencies will often have a network of companies and
websites that it uses to promote its client businesses. When a visitor expresses interest
in one of the agency's clients, the agency passes that lead back to the client. Often
agencies will promote their clients through a directory or list of providers, and when a
visitor requests a quote for a specific service, the agency alerts the appropriate client.
Most agencies will allow clients to specify the type of leads they would like to
receive. For example, a company might choose to limit leads to a certain geographic
region.
Search engines also provide lead generation options. Any business with a website can
appear on a search engine listing for related searches, and visitors can then click a link
and be taken to that company's website. However, some search engines also offer a
pay-per-click lead generation option. The search engine posts a link to the company's
website at the top of the search results form, making it much more likely that
prospective customers will choose to visit that website. However, when a visitor does
click the link the search engine charges that company a small fee, as opposed to the
free 'general' listings. Companies that use pay-per-click advertising are advised to move
cautiously at first, as an overly successful campaign can end up costing far more than
expected!
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